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Samsung takes decisive action on Note 7

News, 12 October 2016
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SEOUL: Facing long-term brand damage as reports of exploding Galaxy Note 7 phones surfaced around the world, Samsung has ceased all production of the device.

The Korean company's Galaxy Note 7 brand has been under siege for several weeks, after exploding batteries and fires in the new smartphones have endangered customers worldwide.

After an initial recall of 2.5m units, Samsung first said it was temporarily halting production of the Note 7 – which only launched in August – as it attempted to stem the fallout before announcing 24 hours later that it would cease production completely.

The move came as Samsung faced a new wave of concerns, with replacement devices that the company believed were safe also melting down. After a smoking Note 7 forced a flight evacuation, a number of airlines banned passengers from bringing the devices on their planes. Many retailers had also refused to sell the smartphone, citing safety concerns.

In South Korea, the company's home market, government regulators had asked Samsung to stop selling or exchanging the Note 7 after possible defects in the replacement devices were confirmed.

Likewise, in the United States, consumer protection authorities warned consumers to not use their Note 7 smartphones.

The crisis has occurred as the smartphone wars have heated up, particularly in ultra-competitive Asian markets: Chinese players Oppo, Huawei and Xiaomi are now among the top five brands globally.

Samsung had positioned the Galaxy Note 7 as a direct competitor to larger screen iPhones, but the timing could not have been worse: arch-rival Apple launched the new iPhone 7 to global fanfare as photos of charred Note 7 smartphones circulated on social media.

"For the benefit of consumers' safety, we stopped sales and exchanges of the Galaxy Note 7 and have consequently decided to stop production," the company said in a statement.

But whether that decisive action has been taken soon enough is open to question, as the fact that the company appeared to be continuing to ship defective products is likely to adversely affect the brand and its reputation.

Some analysts have suggested that many of Samsung's high-end users are likely to shift their preference, but to other Android handsets rather than to Apple.

Data sourced from Bloomberg, Gadgets Now; additional content by Warc staff

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